Workstream 1: Funding and resource flows in the care system - Current Projects

1. Disentangling the relationship between social care and unpaid care for older people in England

Context and problem statement

An increasing need for long-term care combined with modern family dynamics and recent evidence on the impact of caregiving onto carers’ lives raise an inevitable question about the optimal combination of unpaid (informal) care provided by family and friends and social (formal) care. As the decision on the use of the two care modes can be made in any order or simultaneously, one has to understand the full set of implications of any initiative which affects one or the other mode of care, so that in the end we do not end up with a catastrophic increase in unmet needs.

Project aims

The aims are to understand the causal relationship between social care and unpaid care, and to investigate how the relationship between social care and unpaid care differs accordingly to the level of need.

2. Projecting future levels of social care clients and expenditure in England

Context and problem statement

The continuing rise in the number of older people and people with learning disabilities, together with uncertainty about the future supply of unpaid care, have led to concern about the sustainability of public expenditure on care. The Department of Health and Social Care has regularly asked ESHCRU to produce updated projections of future expenditure on adult social care. These have informed spending reviews, provided an input to the Department's own projection model, and fed into the Office for Budget Responsibility (OBR) annual long-term fiscal sustainability report (FSR). The Department will require projections in 2018 for policy development after the Green Paper and for the OBR’s next Fiscal Sustainability Report.

Project aims

The aim is to produce robust projections of future demand for long-term care for older people and younger adults and associated public expenditure, under a range of assumptions and scenarios about future mortality and disability rates, future policy on the living wage, future availability of unpaid care, future policy on the balance of care, and potential funding reforms.

3. Characterising end-of-life health care expenditure

Context and problem statement

End-of-life (EOL) medical spending is often viewed as a major component of aggregate medical expenditure. Unnecessary EOL care is often perceived to be an important cause of high spending fuelling debates regarding the intensity and quality of care. Population ageing, increased patient demand, and funding pressures have placed greater focus on pursuing efficiency savings and EOL health care expenditure continues to attract attention. However, despite the relevance of health care spending for individuals leading up to death, little is known about the patterns or trajectories of spending at EOL. Accurate measures of EOL expenditure, their detailed breakdown, and how these vary over morbidity characteristics is scarce. Do trajectories of expenditure at EOL vary in meaningful ways? For example, are certain conditions associated with a pattern of decline that might be reflected in spending? More detailed information about the profile of spending near EOL can provide important insights about the drivers of expenditure and shed light on potential strategies to mitigate costs while preserving high-quality care for people who are dying.

Project aims

While EOL hospital expenditure is known to significantly elevate health care costs, little is known about the breakdown of such expenditure. This project will document EOL expenditure in the final (up to two) years leading to death by considering distinct profiles of spending. Such profiles will allow patients to be categorised into groups based on their trajectory of spending, for example, persistent, progressive and late rise users of EOL care. We will explore how such profiles vary across patient conditions (e.g. chronic and acute, and multiple conditions) and patient and provider characteristics.

4. Understanding the interdependencies between health and social care resources and arrangements

Context and problem statement

The policy emphasis on the interaction between the health and social care systems stems from the long-standing recognition of the impact on care outcomes of a truly seamless care experience, and from concerns about the negative consequences on the NHS of the recent reductions in social care expenditure and in the number of older people receiving state-brokered social care.
Evidence about substitution and complementarity effects between health and social care, and about the way in which different system configurations affect the performance of the care system is limited. This project has three strands

The effect of social care on outcomes of hospital discharge

The relationship between public funding of social care, and healthcare utilisation, focusing on older people with dementia

Interdependencies between social care and NHS continuing care

Project aims

The proposed project aims to improve our understanding of the nature of the interrelationship between the health and social care system by quantifying the impact of changes in social care resources on performance, as well as to improve the coordination of the two systems and therefore efficiency of the care system as a whole. The project will address following overarching questions:

What are the consequences on the NHS of variations in social care activity and expenditure?

What are the consequences on NHS performance indicators of differences in local system configurations?

5. Assessing the use of linked, longitudinal-health and social care administrative data to evaluate equity and efficiency in the care system

There are gaps in our understanding of the effectiveness and cost-effectiveness of the social care system. Better individual-level evidence on the relationship between user characteristics, services and outcomes would help service commissioners and policy makers to develop the most appropriate services to meet social care needs, and to target social care resources in the most cost-effective way for the health and social care system.

Project aims

The project will examine how administrative records can be used to evaluate equity and efficiency in the care system. It will also assess how gaps in these data could be addressed through additional data collections/surveys.
We will also consider:

What are the typical “care journeys” across health and social care for people with different needs? What are the implications for the distribution of lifetime care expenditures?

Are there differences in the patterns of service use between public and private users?

What is the impact of different services on outcomes for users with different needs?

What is the substitution and complementarity between health and social care services in the production of outcomes?

6. Regulatory Incentives across the system: Managing deficits

Context and problem statement

Hospital providers are increasingly incurring deficits. Payment systems such as the national tariff largely presume that hospitals will receive sufficient revenue to cover their costs. Where prices are set as low as possible to reflect efficient costs, factors such as unanticipated cost inflation and/or variation in case-mix will result in deficits
Given an outcome where many providers have incurred deficits there are a number of alternative mechanisms for restoring financial balance. Providers could receive cash injections equal to their deficit, or they might receive a top-up to the national tariff which would entail a cash injection that is related to the volume and type of activity they have undertaken and which has given rise to the deficit. The regulatory question is which of these – or other alternative mechanisms – should be adopted. Answering that question requires an understanding of what factors contribute to particular trusts incurring deficits, what the implications of those deficits are for performance and how different mechanisms for restoring balance impact on incentives.

Project aims

The project aims to support policy makers in establishing advice and guidance for managing hospital deficits where these are endemic and systemic rather than a consequence of failure to perform.
Our initial investigation will be the relationship between Trust characteristics and their tendency to incur operating deficits. We will then consider the relationships between performance and deficits.

7. Drivers of Health Care Expenditure

Context and problem statement

Year-on-year rises in the real value of healthcare expenditure are thought to be one of the greatest challenges to long-term fiscal sustainability. Drivers include demographic factors, income and wealth effects, technology and cost pressures.

Evaluations of the drivers of the demand for health care typically infer demand from measures of activity and /or expenditure. However, this captures only ‘expressed’ demand which differs from ‘true’ demand because of unexpressed or unmet need (i.e. latent demand). In addition, some elements of expressed demand are potentially avoidable.

This project will seek to identify the drivers of past health care expenditures (HCE), explore how these vary by setting, and identify the steps needed to develop an aggregate model of demand for health care that can inform spending projections.

Project aims

We will address following research questions.

What are the drivers of past trends in healthcare expenditure in terms of demographic change, technology, rising expectations, pay etc. and how much has each of the drivers contributed to past increases in expenditure?

How much has each type of service, such as primary care, pharmaceuticals, emergency secondary care, elective secondary care etc., contributed to past trends in healthcare expenditure and why have there been different trends for different types of care?